Mandatory Paid Sick Leave Isn’t Hurting NYC Businesses – Next City

Mandatory Paid Sick Leave Isn’t Hurting NYC Businesses

A year and a half after New Yorkers won paid sick leave, it's working out just fine. (AP Photo/Mary Altaffer, File)

A year and a half after New York City became the seventh and largest U.S. city to guarantee private workers paid sick leave, the law seems to be a “non-event” for most employers, even as it expanded paid sick leave to 1.4 million previously ineligible workers.

Critics of the Earned Sick Time Act argued that it would lead to major cost burdens on employers, widespread abuse by employees, and an exodus of jobs from the city. But according to a new report released Monday by the Center for Economic and Policy Research at the City University of New York, 86 percent of employers surveyed this year expressed support for the paid sick time law, with almost 85 percent reporting it had no effect on their overall business costs, and 94 percent saying it had no effect on productivity.

The Earned Sick Time Act allows employees of private-sector companies and non-profit organizations that employ five or more people to accrue an hour of paid sick leave for every 30 hours worked. It also allows employees of smaller companies to take unpaid sick leave. About 3.9 million workers are covered under the law, including 1.4 million people who did not have paid sick leave access before.

To gauge whether all the hand wringing prior to the law’s passage reflected the reality a year and a half after it took effect, researchers at the CEPR surveyed 352 employers of five or more workers. They also conducted 30 in-depth on-site interviews with managers. They found that employers, on the whole, had few complaints, and that if anything, abuse is coming from employers, not employees.

That’s because even today, not all employers were aware of the legislation. At 18 percent of the establishments surveyed, employers stated they had not “read, heard or seen any information” about the Earned Sick Time Act. Accordingly, 13 percent of those surveyed were failing to provide sick days to any of their employees; 42 percent were offering paid sick days only to certain categories of worker, denying part-time, temporary and per-diem workers, though their rights are also guaranteed under the law.

Effects on business were also muted compared to projections. Nearly 85 percent of employers reported no effect on overall business costs. The 14 percent who did see a negative impact on their bottom line still reported a modest decline: 9 percent reported a cost increase of less than 3 percent of overall costs, and only 3 percent reported an increase of 3 percent or more.

Because employers saw so little impact on business costs, very few made changes to their hiring, pricing or scheduling practices. Over 91 percent reported no hiring reductions; 97 percent said they did not reduce hours; and 94 percent did not raise prices.

One reason the impact was minimal is that employers are adept at shifting responsibilities among employees to ensure the work still gets done. Another is that employees aren’t taking all of the time they’re owed. Employers told researchers that on average, only three-quarters of workers had taken the leave available to them, and nearly a quarter had used no sick days in the year preceding the survey. Contrary to fears that the sick days would be abused, the report found that “employees treat paid sick days not as an entitlement, but as insurance, to use when illness strikes the worker or a family member.” A whopping 98 percent of survey respondents reported no known cases of abuse.

At least 26 U.S. cities have paid sick leave laws, as do five states, one county and Washington, D.C. Here’s a guide to how 33 of those laws differ.

Jen Kinney is a freelance writer and documentary photographer. Her work has also appeared in Philadelphia Magazine, High Country News online, and the Anchorage Press. She is currently a student of radio production at the Salt Institute of Documentary Studies. See her work at jakinney.com.

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Tags: new york cityjobsincome inequality